How Much Does Health Insurance Cost For 55 Year Old Wellness As a Business Strategy

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Wellness As a Business Strategy

Where do health care dollars go?

US health care costs have risen from $1,100 per person in 1980 to $7,900 in 2009. Today, $1.5 trillion, 75 percent of all health care spending, is devoted to treating chronic diseases that are often to prevent Ninety-nine percent of all Medicare dollars spent are related to chronic diseases. Obesity and its complications (diabetes, cancer and heart disease) are responsible for about $147 billion annually. Health care reform must address coverage for all Americans while dramatically reducing costs. If the situation is not addressed, American companies will not compete in the global market, raise taxes and undermine our economy.

More than 130 million Americans suffer from chronic diseases and millions of lives are cut short unnecessarily. The Partnership for Prevention report states that better use of just five preventive services would save more than 100,000 lives a year. Eliminating just three risk factors: poor diet, inactivity and smoking would prevent 80% of heart disease, stroke, type 2 diabetes and 40% of all cancers in the US.

The greatest public health threat our nation has ever faced

A recent study conducted by Emory University revealed that obesity is the fastest growing public health challenge our nation has ever faced. The Center for Disease Control (CDC) attributes the problem to environments that promote increased food intake, unhealthy foods, and physical inactivity. Obesity is defined as having a body mass index (BMI) of 30 or more which is calculated by dividing weight in kilograms by height in meters squared. For those of us who haven’t memorized metric conversions and can’t do the math in our heads, the US National Institutes of Health has an online BMI calculator.

Obesity rates have increased from 12% in 1989 to 28% in 2010. If current trends continue, half of the adult population will be obese by 2020. Direct health care costs for to obesity will rise to $344 billion (21 percent of the nation’s direct health care spending) unless the current trend is halted (The future costs of obesity, 2009). The 2009 Obesity in America Report by the Trust for America’s Health and the Robert Wood Johnson Foundation indicates that obesity rates increased in 23 states and did not decrease in any state between 2008 and 2009. Obesity rates among children have risen to an unprecedented level. 30 percent (obesity rates continue to rise, 2009). Dr. David L. Katz, director of the Center for Prevention Research at Yale University School of Medicine says, “It’s truly a public health crisis of the first order, driving many of the trends in chronic disease, in particular the ever-increasing rates of diabetes.” (The future costs of obesity, 2009).

According to the New England Journal of Medicine, smoking rates have dropped 20 percent in the past 15 years. Unfortunately, the health benefits we should be realizing from the decline in smoking have been offset by obesity rates that have soared 48 percent in the same time period (Mertens, 2009). What should we conclude? As a nation, we addressed smoking as a public health threat. The figures speak for themselves. We can do the same with the obesity epidemic.

Reversing the trend

Raising public awareness of the seriousness of this threat is a starting point, but it is not enough to drive change. Reversing the trend will require a large-scale national campaign that includes evidence-based approaches. Although there is no specific template for health initiative program design, successful programs involve community, school, health systems, and workplace intervention. The Partnership for the Fight Against Chronic Diseases (PFCD) suggests that the following five elements are essential:

  • Removing barriers and empowering Americans to take control of their health
  • Educate Americans to view obesity as a serious, life-threatening disease
  • Ensuring that fear of the stigma of obesity does not overshadow the need to fight it
  • Redesigning our healthcare system to treat obesity as a preventable disease
  • Engage employers and communities to get them to invest in promoting well-being (The Lewen Group, 2009)

Business need

The US workforce is truly the backbone of our economy. Entrepreneurs are a critical piece of the solution to the current health crisis and obesity epidemic. Companies need strategies to develop sustainable and adaptable programs that work to improve employee health and reduce costs. HR professionals are uniquely positioned to serve as catalysts in their organizations to educate and support employees through programs that promote wellness. Well-designed wellness programs can play a critical role in cultural reform and turning the tide of the obesity epidemic.

Employee absenteeism and presenteeism due to chronic illness have a detrimental effect on profitability. Almost 80% of workers have at least one chronic disease and 55% have more than one chronic disease. Absenteeism is defined as absence from work due to illness. Presenteeism is defined as the loss of productivity due to employees showing up for work but being less productive due to illness. The loss of economic output associated with absenteeism and presenteeism is costing American companies one trillion dollars annually (US Workplace Wellness Alliance, 2009). Wellness programs can improve employee morale, improve productivity, reduce absenteeism, attract and retain employees, reduce costs, improve employee safety, promote corporate image, and fulfill social responsibility.

Success stories

Many companies were ahead of the curve and are getting a return on their investment in employee wellness programs. IBM has saved $175 million by implementing wellness programs (Partnership for Prevention, 2007).

Lincoln Industries is a manufacturing plant with 565 employees. They have a multifaceted wellness program that rewards behaviors. One of the coveted rewards employees can aspire to is a three-day company-paid trip to climb a 14,000-foot peak in Colorado. Lincoln has reported an annual savings of $2 million in healthcare costs. They spend approximately $4,000 per employee. In addition, workers’ compensation costs have been reduced by $360,000 per year. The ROI of this program is 5:1 (Design is important2010).

In 2005, the grocery chain Safeway implemented its Healthy Measures program. They have made continuous improvements every year. Safeway’s plan uses a provision of the Health Insurance Portability and Accountability Act of 1996 that allows premiums to be differentiated based on behaviors. CEO Steven Burd emphasizes that the key to successful plans lies in rewarding behavior. Safeway is committed to building a culture of health and fitness by addressing behaviors related to chronic diseases such as smoking, obesity, blood pressure, and cholesterol (Burd, 2009). During the four-year period following implementation, Safeway’s health care costs remained flat, while most US companies have experienced a 38 percent increase in costs over the same four-year period years. In addition to the Healthy Measures program, Safeway supports employee behaviors by offering:

  • A state-of-the-art gym near Safeway headquarters
  • Free lunch in the company cafeteria for every eight visits to the gym
  • Subsidized cafeteria, which offers a lot of vegetarian cuisine
  • Portion size, calorie count, cholesterol, and fiber count published for all cafeteria prepared meals (Rodman & Gathright, 2009).

Programs that combine a culture of wellness with incentives that reward healthy behavior have proven to be far more effective than traditional wellness programs that have had disappointing adherence rates. Price Waterhouse Coopers found that less than 15 percent of eligible employees enroll in traditional wellness programs. However, if they received some kind of incentive, employees are two to four times more likely to enroll. In another study by Suffolk University, 73% of Americans surveyed would change their behavior if they could save money (Donnelly, 2009).

Are you leading change?

As with any change initiative, creating a culture of health and wellness for your organization will have its unique challenges. However, the alternative is not attractive. Change is inevitable, growth is optional. Your organization will experience change, but the question is: will you be at the forefront leading positive change or reacting to a crisis after it erupts? America’s business leaders should jump at the opportunity to start a culture of health and wellness in their organizations not only because it’s socially responsible, but also because it’s good for the bottom line. Executives who show a strong vision and model the desired behaviors will have a distinct advantage over those who sit back and wait to see what happens.

Works cited

Burd, Steven A. “How Safeway is Lowering Health Care Costs.” Wall Street Journal, 12 June 2009. Web. January 8, 2010.

Design matters: Health promotion ROI is closely tied to evidence-based programming. Atlanta: Institute for Advances in Policy Solutions, 2009. Web. January 4, 2010.

Donnelly, Julie. “The Employee Health Massage: Financial Incentives Change Behaviors, Experts Say.” Boston Business Magazine (2009).

The Lewin group, comp. Keeping America Healthy: Essential Elements of Successful Programs. Rep. Partnership to Fight Chronic Disease, June 2008. Web. December 30, 2009.

Mertens, Maggie. “Obesity Epidemic Cancels Anti-Smoking Gains”. Web log publication. NPR Health Blog. National Public Radio, December 2, 2009. Web. January 11, 2010.

“Obesity rates continue to rise.” Forbes. HealthDay News, 1 Jul 2009. Web. January 12, 2010.

Rodman, Juliet, and Fiona Gathright. “Safeway Wellness Incentive Program”. Wellness Corporate Insights (January 6, 2009). Corporate Wellness Solutions. 6 Jan. 2009. Web. January 11, 2010.

Trott, Bill, ed. “More Americans Than Ever Are Obese: CDC”. Reuters. Thomson Reuters 2009, 8 July 2009. Web. January 11, 2010.

United Health Foundation, American Public Health Association and Partnership for Prevention. The Future Costs of Obesity: National and State Estimates of the Impact of Obesity on Direct Health Care Expenditures. Rep. 2009. Print.

American Association for Prevention. National Prevention Priorities Commission. Preventive care: A national profile on utilization, disparities, and health benefits. Partnership for Prevention, 7 Aug. 2007. Web. January 5, 2010.

US Workplace Wellness Alliance. Collaboration to fight chronic diseases. The Burden of Chronic Disease on US Business and Competitiveness. By Kenneth E. Thorpe, PhD., Anthony C. Wisniewski, and Garry M. Lindsay. 2009 Chronic Disease Almanac, 2009. Web. January 10, 2010.

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